The development of neurons in the vertebrate retina is governed by the interplay between positive and negative regulators of differentiation. Several genes, including Notch, Delta, and HES1 have been shown to function as negative regulators of neurogenesis during retinal development. However, the positive factors controlling retinal neurogenesis have yet to be defined. We have identified a gene in Xenopus laevis called Xath5, that belongs to the basic helix-loop-helix (bHLH) family of transcription factors. Xath5 is a homologous to the Drosophila atonal gene, which is required for the determination and differentiation of photoreceptors during fly eye development. In Xenopus, Xath5 is relatively restricted in expression to the developing retina and appears to function as a differentiation factor for retinal neurons: it is expressed in differentiating retinal progenitor cells and appears to promote early differentiation of these cells when overexpressed. Xath5 may therefore function as an important positive regulator of neurogenesis in the vertebrate retina. The experiments is this proposal are directed towards understanding how Xath5 regulates retinal neuron differentiation during Xenopus eye development. First, we will use dominantly-interfering forms of Xath5 to disrupt its function and determine whether Xath5 is required for the differentiation of all or a subset of retinal neurons. Second, we will determine whether the negative regulators of retinal neurogenesis, Notch and Delta, block retinal cell differentiation by inhibiting the expression or function of Xath5. Third, we will assess the ability of Xath5 to heterodimerize with other bHLH proteins expressed in the developing retina, and determine the functional significance of this for retinal cell differentiation. Fourth, we will identify downstream target genes in the developing retina whose expression is directly regulated by Xath5. Ultimately the role of candidate target genes in regulating retinal cell differentiation will be determined. In summary, these experiments will lay the foundation for understanding the molecular mechanisms regulating retinal neuron development, and will underscore the importance of both positive and negative regulators in this process. In addition, these studies should provide more general insight into the role of bHLH proteins in the control of vertebrate nervous system development.